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HMRC Penalites & Fines

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I have a client who has only recently came to me who didn't keep his tax affairs in order. Upon checking the self assessment account the individual owes circa £200k and I can see their was an enquiry opened at the time which I am currently not aware of what this was regarding.

The client wants to get his tax affairs in order and wishes to make an agreement with HMRC going forward to repay the amount owed.

I highgly doubt the indivudal would be able to pay the amounts owed in the next 10 years never mind a 12 monthly arrangment as they haven't been working for the past few years due to personal reasons.

Has anyone any experience of what HMRC will agree to pay going forward?

Thanks in advance.

Replies (4)

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By Duggimon
16th Mar 2021 09:12

HMRC would rather get their money than force bankruptcy and not get it, however if the client has any assets of value they would expect those liquidated to meet his obligations, and as much as possible paid out of income on an ongoing basis.

You're well in to the exceptional circumstances territory, in my own experience the limits they give for time to pay arrangements can be extended a long way past what they'll say initially but you will have to do the work to find out and then demonstrate what is the maximum possible that can be paid. I have a client on a six year agreement, that's the longest I've helped arrange and I was told that's the longest possible but I would take that with a grain of salt.

I would start with determining whether the obligations are correct as stated by HMRC, then a full and frank discussion with the client about what they can manage, then at that point open the negotiation with HMRC.

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By bernard michael
16th Mar 2021 09:15

I did one once with similar figures and manage to resolve it amicably ( eventually)

1 You need to establish what has happened to the enquiry.
2. Establish whether returns have been submitted for all years
3. Once you have the information from 1 & 2 see what the client can afford to repay
4. Negotiate with HMRC

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By Roland195
16th Mar 2021 09:15

It would seem he may be better advised to speak with an Insolvency Practitioner.

You would have to try to establish what sort of difference bringing his affairs up to date would make - if it substantially reduces the tax assessed assuming within time then perhaps but if it's just going to be deckchairs off the Titanic, then no point you getting involved.

And yes, no doubt you will have to make an SAR.

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By Moo
16th Mar 2021 16:04

Previous advice all very sensible but I suggest before going any further you satisfy yourself that someone will be paying your fees as it doesn't sound like your new client will be able to.

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